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Apple might have cut iPad orders by 25%

Posted: , by Victor H.

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Apple might have cut iPad orders by 25%
Update: Surprise, surprise - the JPMorgan report seems to be erroneous and now we know why US-based JPMorgan analyst Moskowitz shrugged shoulders at the initial report by his Hong Kong-based colleague Gokul Hariharan. JPM has now withdrawn the report, which seemed to be one of the main reasons why Apple shares slid 3 percentage points two days ago. Now, Cupertino stock has bounced back to its earlier levels.

"Apple is fine," Moskowitz stressed.

The misleading report seems to have a grain of truth in it, though, but the conclusion about a drop in iPad orders might have been a bit far-fetched. Apple might indeed be cutting order to Chinese contractors, but at the same time the company is transferring business to Brazil, compensating for the cut. 

At the same time, Barclays Capital also doubted the suggestion for a slowdown in shipments: “The numbers being circulated Monday might be related to components and not to actual iPad 2 shipments, in our view. Components checks (are) not a good proxy for actual iPad product shipments.”

Also, we reported back in August that both Apple and HTC might be cutting on orders for components supplies because of the ongoing financial crisis which they feared will lower demand for gadgets, which all big companies do.


Apple is cutting orders for iPads by 25% - a drop which might affect the company’s Chinese contractors like Hon Hai the most, a JPMorgan Chase report states. Some supply-chain vendors have reported that Cupertino has cut orders for the tablet by 25% for the fourth quarter of the year. JPMorgan analysts noted that it’s the first cut they’ve seen for the iPad so far.

And no wonder - the second-generation iPad has been selling like hotcakes with second-quarter sales reaching 9.25 million units, a year-on-year growth of the impressive 183%. US-based Mark Moskowitz, also an analyst at JPMorgan, however, didn’t lower his high expectations for 10.9 million to 12 million iPads sold in the last two quarters.

At the same time, there don’t seem to be any true iPad competitors - sales of Android tablets have generally been slow, while RIM has shipped only 200,000 units of its 7-inch PlayBook last quarter - nearly as much as Apple ships every two days or so. HP’s TouchPad has also been a non-competitor as it was pulled after less than two months of circulation. There are two new threats coming the iPad way but it’s hard to see why would they be more successful than what we’ve seen so far. Nonetheless, the Amazon 7-inch tablet is expected to break cover officially very soon, while Windows 8 tablets are also in the works, but will probably arrive much much later.

source: Bloomberg

25 Comments
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posted on 26 Sep 2011, 04:04

1. John (unregistered)


"Actions speak more than words." Apple does it again; critics => :(..
Apple truely defines America's international political policies. It takes advantage where ever possible; true opportunist.

http://www.phonearena.com/news/The-iPhones-89-retention-rate-crushes-rivals_id22373

posted on 27 Sep 2011, 18:20

26. AppleFUD (unregistered)


You are an idiot. You do realize that an 89% retention rate with a flat market share growth ultimately means you have 0% . . . it's just a matter of time.

Don't people even think a little any more?!?!?!

posted on 26 Sep 2011, 05:54 2

3. som (Posts: 768; Member since: 10 Nov 2009)


Samsung will takeover 50% share of Apple iPad and iPhone in 5 years. As Android improvements continue and Samsung is continuing and improving new innovations and next generation technology.

posted on 26 Sep 2011, 06:20 1

4. Sam (unregistered)


Samsung is planning to bring more of Bada. If this happens Samsung can't over take Apple. Its better if Samsung sticks to android.

posted on 26 Sep 2011, 06:53 2

5. remixfa (Posts: 13902; Member since: 19 Dec 2008)


the only person that thinks that bada has a fighting chance is Peter.

Samsung themselves have said that bada is a "value brand" and not going to be on tablets. Android is their "premium brand".

posted on 26 Sep 2011, 06:55 1

6. remixfa (Posts: 13902; Member since: 19 Dec 2008)


soo.. apple is cutting down orders even though they dont have a "true competitor". something smells fishy with that.

either competitors are taking away more than people realize or the ipad2 wasnt a big enough upgrade for most ipad1 owners to change to, and there isnt as big of a market for the thing as people thought. Its almost christmas, they should be ramping up production, not scaling it back.

posted on 26 Sep 2011, 07:51 1

9. atwork (unregistered)


Apple, if their smart, is looking ahead to the ipad 3. My bet is they're changing direction and making a competitor to the windows 8 tabs that will be released shortly. Why continue to pay for outdated technology? The market is flooded with ipads and they'll continue production enough to turn a profit, however, I think now is time to redesign.

posted on 26 Sep 2011, 09:10 1

10. corps1089 (Posts: 492; Member since: 20 Jan 2010)


Could be Apple's spin on the inability of suppliers to meet the demand for iPad screens.
http://www.phonearena.com/news/Goldman-Sachs-analyst-Apple-to-have-production-difficulties-with-the-new-iPad-may-lead-to-limited-availability-at-launch_id17137

http://www.phonearena.com/news/WSJ-reconfirms-that-the-next-iPad-with-a-high-res-display-will-be-postponed-for-early-2012_id21353

http://www.phonearena.com/news/LG-Samsung-and-Sharp-to-share-the-burden-of-the-next-iPad-high-res-screen-supply_id21495


or is it just coincidence this is announced on the heels of the Samsung Windows 8 slate at BUILD?

posted on 26 Sep 2011, 19:07 2

17. remixfa (Posts: 13902; Member since: 19 Dec 2008)


didnt think of that.. good point about the supplier scarcity.

posted on 26 Sep 2011, 22:24 1

19. corps1089 (Posts: 492; Member since: 20 Jan 2010)


Yeah, but you're right, it still seems strange with no competitors to cut into Apple's share.

Apple seems to have lots of growth in units shipped, but I think it has to do more with Apple's expansion into new markets versus any expansion of share in existing markets. If that is correct, Apple will run out of developed countries to expand to, and then their growth will almost halt overnight.

Then the analysts will scream sell and and the world would come crashing down around Cupertino...

posted on 27 Sep 2011, 06:50 2

20. remixfa (Posts: 13902; Member since: 19 Dec 2008)


well, the update says you were probably right. good job. :)

posted on 27 Sep 2011, 11:29

22. taco50 (banned) (Posts: 5506; Member since: 08 Oct 2009)


The update has nothing to do with his delusional post

posted on 27 Sep 2011, 13:01 1

23. corps1089 (Posts: 492; Member since: 20 Jan 2010)


3 for 3 in one thread!
1) shortage of supplies, not demand for product:
check
2) expansion in new markets:
check
3) hit in stock price when units sold slows down:
check

Not bad, and taco's disagreement in post 22 proves I am on the right track...

posted on 26 Sep 2011, 06:55

7. Droid_X_Doug (Posts: 5530; Member since: 22 Dec 2010)


Is Sam the new alter-ego for Peter from Sweden? Peter, if you are trying to sneak back in, you have to drop the Bada obsession. Otherwise, you risk being automatically deleted like the spam posts.

posted on 26 Sep 2011, 07:02

8. Droid_X_Doug (Posts: 5530; Member since: 22 Dec 2010)


@remix - I have been wondering what gives with Apple scaling back their iPad 2 orders as well. Maybe there will be a one more thing... moment in Cupertino on October 4th? Or the production is being shifted to the iPhone 5? Dunno. It is odd, considering the start of XMAS shopping season and the deals that seem to be in the works to get the iPad spread far and wide.

posted on 26 Sep 2011, 09:16

11. M0nkeyBr (Posts: 77; Member since: 13 Jul 2011)


You can thank my school for that
that ordered over 5,000

posted on 26 Sep 2011, 13:41

13. Droid_X_Doug (Posts: 5530; Member since: 22 Dec 2010)


Schools, airlines, and, and, and.

posted on 26 Sep 2011, 12:04

12. taco50 (banned) (Posts: 5506; Member since: 08 Oct 2009)


Apple is switching orders to different manufacturers so existing ones are getting less. iPad is selling better than ever.

posted on 26 Sep 2011, 13:55

14. Immolate (Posts: 270; Member since: 17 Jun 2011)


The iPad will meet its Waterloo some day, as all things must, but not yet I think. The market for over-priced toys is saturated, and Android tablet makers are trying to attack into that market for whatever reason. I suspect they figure that what worked in the phone market will work with tablets as well: variety will win out. But different market, different dynamics. Phones are subsidized consistently to $200-$300. You've got to pay full boat for tablets, so they are far more price-sensitive. When Android figures that out and finds a way to offer feature competitive or superior tablets to the iPad for $300, then we'll see something happen. Until then, more $500-$600 tablets break against the rocks.

posted on 26 Sep 2011, 15:00 1

15. gallitoking (Posts: 4680; Member since: 17 May 2011)


like Taco said... there is no tablet market.. just the ipad market.. wise words..thank you taco

posted on 26 Sep 2011, 19:07 2

18. remixfa (Posts: 13902; Member since: 19 Dec 2008)


wow.. you just proved your an idiot. you used the words "wise words" and "taco" in the same sentence as a positive. lololol.

posted on 26 Sep 2011, 16:34 2

16. Stuntman (Posts: 707; Member since: 01 Aug 2011)


The other tablets are not significantly better than the iPads in areas that a majority of consumers want at this time. Multitasking and Flash are some features not on the iPads, but for most people, it is not enough of a significant advantage to get a different tablet.

For me, the keyboard dock on the Asus Eee Pad Transformer is a significant advantage that matters to me. If not for the keyboard dock, I would have gotten an iPad 2 instead of the Eee Pad.

I think over time, other manufacturers will gain more and more market share. It takes time for competitors to come up with a good enough competing product. It will also take some time before many people have actually heard of a tablet not called the iPad. Right now, if I show people my Eee Pad, most of them would think it is an iPad.

posted on 27 Sep 2011, 13:04

24. corps1089 (Posts: 492; Member since: 20 Jan 2010)


I agree with your points on competitors catching up.

Plus the competition has to be better than the iPad to make consumers take notice. Otherwise being equal to the iPad is not enough to overcome the momentum, marketing force, and deserved following that Apple products gather.

posted on 27 Sep 2011, 18:29

27. AppleFUD (unregistered)


Apple will sell there stuff well, they are great at marketing however, over the long run they have yet to dominant a market without arbitrarily eliminating other products form the same category.

Take the iPod. . . their great market leader. 40 some million or 80 million per year, whatever. It's dwarfed by the 1Billion cell phones sold per year and 50% of cell phone users say they use their cell phone to listen to music, but we say the iPod is the dominant digital music player????

that's exactly what's going on with the iPad. It's market share is inflated by the fact that Windows tablets are not counted in the same category as they do more, thus they are PCs. The Nook Color isn't counted either and it may very well be the best selling "ipad-like tablet" in North America (600K/month). Ultimately the market share for the iPad is completely fictitious.

There will be more tablets and we will see highly functional devices like the transformer that are capable of doing more and we'll see how pro-apple shills try to spin things then--we can't count those tablets because they have keyboard docks or anything that can use a mouse isn't in the same category, etc. . ..

posted on 27 Sep 2011, 15:04

25. InspectorGadget80 (Posts: 6135; Member since: 26 Mar 2011)


Why is this news?

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